It is widely, but not universally accepted, that type 2 diabetes results from the failure of beta cells to compensate for insulin resistant.  Objections have been raised because insulin rises long before glucose (Starling's Law of the Pancreas), which can be interpreted to mean that hyperinsulinemia causes hyperglycemia rather than the reverse.  Moreover, even if one accepts that hyperinsulinemia is a compensatory response, it is not clear what the signal for compensation is if glucose remains normal.   We address this by extending the pioneering mathematical model of Topp et al (J. Theor Biol.  2000 206:605) for regulation of beta-cell mass and diabetes progression.  The revised model includes, among other things, the hypothesis of Dor and colleagues that beta-cell proliferation is governed by insulin secretion rate, not directly by glucose.  We show that the system exhibits threshold behavior resulting from bistability between health and disease.  This accounts for clinical observations that prevention is easier than cure and for the remarkable ability of bariatric surgery to rapidly reverse diabetes. * Joint work with Joon Ha